ClearBridge American Energy MLP Fund Inc. ("CBA") Announces Initial Quarterly Distribution Rate for
ClearBridge American Energy MLP Fund Inc. ("CBA") Announces Initial Quarterly Distribution Rate for August 2013
NEW YORK--(BUSINESS WIRE)-- ClearBridge American Energy MLP Fund Inc. (NYS: CBA) today announced its initial quarterly distribution of $0.3000 per common share payable in August 2013. Based on the Fund's offering price of $20.00 per share, this equates to an annualized distribution rate of 6.00%.
The distribution schedule appears below:
|Month||Ex-Date||Record Date||Payable Date||Amount|
It is currently anticipated that substantially all of this distribution will be treated for tax purposes as a return of capital. The final determination of such amount will be made in early 2014 when the Fund can determine its earnings and profits. The final tax status of the distribution may differ substantially from this preliminary information.
This press release is not for tax reporting purposes but is being provided to announce the amount of the Fund's distributions that have been declared by the Board of Directors. In early 2014, after definitive information is available, the Fund will send stockholders a Form 1099-DIV, if applicable, specifying how the distributions paid by the Fund during the prior calendar year should be characterized for purposes of reporting the distributions on a stockholder's tax return (e.g., ordinary income, long-term capital gain or return of capital).
This distribution is the first declared by the Fund following its successful initial public offering that raised approximately $1.2 billion in assets, assuming full exercise of the underwriters' overallotment option, which may or may not occur. The Fund anticipates declaring and paying its distributions quarterly based on its November 30th fiscal year.
The Fund's investment objective is to provide a high level of total return, with an equal emphasis on current distributions and capital appreciation. There can be no assurance that the Fund will achieve its investment objective.
Under normal market conditions, the Fund will invest at least 80% of its Managed Assets (as defined in the Prospectus) in U.S based energy MLPs (the "80% policy"). Initially, the Fund intends to focus its investments on MLPs that, in ClearBridge's opinion, are poised to benefit from the growing production and usage of natural gas, while minimizing exposure to commodity price fluctuations. For purposes of the 80% policy, the Fund considers investments in MLPs to include investments that offer economic exposure to public and private MLPs in the form of MLP equity securities, securities of entities holding primarily general partner or managing member interests in MLPs, securities that are derivatives of interests in MLPs, including I-Shares, exchange-traded funds and debt securities of MLPs. Energy entities are engaged in the business of exploring, developing, producing, gathering, transporting, processing, storing, refining, distributing, mining or marketing of natural gas, natural gas liquids (including propane), crude oil, refined petroleum products or coal.
The types of MLPs in which the Fund intends to invest historically have made cash distributions to limited partners or members that exceed the amount of taxable income allocable to limited partners or members, due to a variety of factors, including significant non-cash deductions such as depreciation and depletion. If the cash distributions exceed the taxable income reported in a particular tax year, the excess cash distributions would not be taxed as income to the Fund in that tax year but rather would be treated as a return of capital for United States federal income tax purposes to the extent of the Fund's basis in its MLP units. Similarly, the Fund expects to distribute cash in excess of its earnings and profits to Common Stockholders which may be treated as a return of capital to the extent of the Common Stockholders' cost basis in the Fund's Common Stock. As a result, the Fund's Common Stockholders should expect to receive distributions that are generally tax-deferred and represent a return of capital although no assurance can be given in this regard. For tax purposes, a return of capital generally represents a return of a Common Stockholder's initial investment in the Fund rather than a distribution of the Fund's earnings. Any distribution received by Common Stockholders that is treated as a return of capital generally will result in a reduction in basis in their shares, which may increase the capital gain, or reduce the capital loss, realized upon the sale of such shares.
ClearBridge American Energy MLP Fund Inc. is a non-diversified, closed-end management investment company which is advised by Legg Mason Partners Fund Advisor, LLC ("LMPFA") and subadvised by ClearBridge Investments, LLC ("ClearBridge"). LMPFA and ClearBridge are wholly owned subsidiaries of Legg Mason, Inc. ("Legg Mason").
For more information, please contact the Fund at 1-888-777-0102 or visit the Fund's web site at www.lmcef.com.
Data and commentary provided in this press release are for informational purposes only. Legg Mason and its affiliates do not engage in selling shares of the Fund.
ClearBridge American Energy MLP Fund Inc.
Maria Rosati, 212-805-6036
KEYWORDS: United States North America New York
The article ClearBridge American Energy MLP Fund Inc. ("CBA") Announces Initial Quarterly Distribution Rate for August 2013 originally appeared on Fool.com.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.